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The key to rebuilding trust in the financial services

By Stuart Wilson
 — 1 minute read

From the royal commission to COVID-19, the financial services industry has faced a host of recent challenges that have impacted customer trust in the industry and driven heightened regulatory scrutiny.

Stuart Wilson

The financial services industry is currently in a period of transition and transformation, with an opportunity to redefine industry standards and rebuild trust with customers, regulators and industry stakeholders. The industry is realising the power of data and security to help avoid issues, such as the “fee for no service” scandal, and to improve customer satisfaction and brand loyalty. 

Banks and financial institutions manage customer data everyday, yet Imperva research shows the sector is at the highest risk in Australia for cyber-security threats, with 47.7 per cent of website traffic on financial sites generated by illegal sources. Unfortunately, this is not a new challenge for the industry, with financial services the most targeted sector for the past two consecutive years. 

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A rising challenge  
While the industry has recognised the importance of using data-led insights to improve the customer experience, protecting paths to that data from nefarious sources has been less of a priority. While innovative digital applications, live chatbots, and optimised websites can encourage brand favourability, they also increase the risk of cyber attacks and security breaches. 

Cyber criminals continue to grow in sophistication and are constantly finding new ways to access data. The industry has seen this recently, with an uptick in cyber attacks on business data systems, such as the recent string of attacks that impacted the Australian Securities and Investments Commission (ASIC) and the banking sector. 

Rising cyber threats are also directly impacting customers, with sophisticated cyber criminals using banking data to target vulnerable customers with scams and phishing attacks. We have seen an increase in regulatory focus on this issue, with the Australian Financial Complaints Authority issuing significant fines for banks that fail to protect their customers. 

The cost of failing to protect customers can be high and result in customer and revenue loss, a drop in shareholder confidence, increase in regulatory scrutiny and fines, and a long-lasting negative impact to business reputation. 

A sensible investment
While it may seem technology and digitisation are causing more challenges for the industry, it is imperative we continue to innovate and see this as an opportunity to exercise good corporate governance, engage customers, and provide value-add solutions. Investing in strong cyber-security and data management can have big business pay-offs and help deliver a positive user experience. 

Streamlining hardware and software spending, eliminating database server load, and reducing manual processes can also lead to notable cost savings beyond tightening security. For a global bank, these simple steps led to $90 million in savings, a 70 per cent reduction in labour costs, and a 90 per cent cut in IT costs. 

Additionally, an online trading platform, processing thousands of transactions every minute, was being increasingly targeted by network attacks. Through strong cyber security, the company redirected and managed all illegitimate traffic, ensuring a safe, seamless and easy experience for traders.

Protecting all paths to data 
It is integral to protect all paths to data – not just the front door. As banks and wealth providers increasingly rely on apps and APIs, this provides fresh opportunities for cyber criminals to steal customer information. Cyber security needs to extend beyond websites and encompass all digital paths. 

Understanding where critical data exists, how it is accessed, and the types of data stored is critical. The rapid rise in data sharing between organisations and individuals has also contributed to an uptick in cyber-security attacks. Financial providers need to be able to evaluate, monitor and detect threats to data in real-time and seamlessly take action with minimal requirement for manual intervention. 

The overarching goal of cyber security is to mitigate online attacks closest to the source and furthest away from your organisation’s network and infrastructure. Beyond breaches of privacy, at a minimum, cyber attacks can significantly impact the performance of websites, causing significant slowdowns or shutdowns. The closer we mitigate attacks to the source, the less likely it is to impact on customer experience and satisfaction.  

The rapid digitisation of financial services has created new, complex issues for the industry. However, for those institutions investing in robust, end-to-end cyber security and using data innovatively, there is significant opportunity to cost savings and, most importantly, authentically rebuild trust, credibility and confidence with customers and regulators. 

Stuart Wilson, APAC vice-president for financial services, Imperva

 

The key to rebuilding trust in the financial services
Stuart Wilson
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